Batista Miner Counting on Trafigura to Emerge From Debt Woes – by Juan Pablo Spinetto (Bloomberg News – September 15, 2015)

A year ago, former billionaire Eike Batista’s iron-ore unit was halting output and battling creditors as prices plunged. Now it’s planning to reemerge with the help of commodities trader Trafigura Beheer BV.

MMX Sudeste Mineracao SA is selling its mining assets to Amsterdam-based Trafigura as part of a restructuring plan approved by creditors representing about 800 million reais ($207 million) in debt, Ricardo Werneck, who heads the parent company MMX Mineracao e Metalicos SA, said in an interview.

The unit also expects to obtain about 70 million reais from the sale of logistics assets and farmlands, allowing creditors to recover about 30 percent of the value of their claims, he said.

“There is no better option; the alternative is the failure of the company,” Werneck, 44, said. “Trafigura is a big part,” of the recovery plan, he said. MMX, which Batista listed in 2006 when the commodities super-cycle was in full swing, stopped operations at its only producing unit in August 2014 as the value of the steelmaking ingredient plunged and debt mounted.

In October, MMX Sudeste, the unit that holds most of the company’s assets, filed for bankruptcy protection. After months of delays and negotiations, on Aug. 28. creditors approved a plan to recover the business.

As part of the proposal, Trafigura will acquire two mining and iron-ore processing assets in Minas Gerais state, southeastern Brazil, for about 140 million reais. Creditors will also have the option to remain as minority shareholders in the assets, Werneck said.

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